Accountability Audit Report
Port of Seattle
For the period January 1, 2017 through December 31, 2017
Published (Inserted by OS)
Report No. 1023095
Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021 (360) 902-0370 Pat.McCarthy@sao.wa.gov
Office of the Washington State Auditor
Pat McCarthy
Issue Date – (Inserted by OS)
Port Commission
Port of Seattle
Seattle, Washington
Report on Accountability
Thank you for the opportunity to work with you to promote accountability, integrity and openness
in government. The State Auditor’s Office takes seriously our role of providing state and local
governments with assurance and accountability as the independent auditor of public accounts. In
this way, we strive to help government work better, cost less, deliver higher value and earn greater
public trust.
Independent audits provide essential accountability and transparency for Port operations. This
information is valuable to management, the governing body and public stakeholders when
assessing the government’s stewardship of public resources.
The attached comprises our independent audit report on the Port’s compliance with applicable
requirements and safeguarding of public resources for the areas we examined. We appreciate the
opportunity to work with your staff and we value your cooperation during the audit.
Sincerely,
Pat McCarthy
State Auditor
Olympia, WA
Washington State Auditor’s Office Page 3
TABLE OF CONTENTS
Audit Results ................................................................................................................................... 4
Related Reports ............................................................................................................................... 5
Information about the Port .............................................................................................................. 6
About the State Auditor's Office ..................................................................................................... 7
Washington State Auditor’s Office Page 4
AUDIT RESULTS
This report describes the overall results and conclusions for the areas we examined. In most of the
areas we examined, Port operations complied with applicable state laws, regulations, and its own
policies, and provided adequate controls over safeguarding of public resources.
As referenced above, we noted certain matters that we communicated to Port management and
Board of Commissioners in a letter dated February 12, 2019, related to compensation increases.
We appreciate the Port’s commitment to resolving those matters.
About the audit
This report contains the results of our independent accountability audit of the Port of Seattle from
January 1, 2017 through December 31, 2017.
Management is responsible for ensuring compliance and adequate safeguarding of public resources
from fraud, loss or abuse. This includes the design, implementation and maintenance of internal
controls relevant to these objectives.
This audit was conducted under the authority of RCW 43.09.260, which requires the Office of the
State Auditor to examine the financial affairs of all local governments. Our audit involved
performing procedures to obtain evidence about the Port’s uses of public resources, compliance
with state laws and regulations and its own policies and procedures, and internal controls over such
matters.
In keeping with general auditing practices, we do not examine every transaction, activity or area.
Instead, based on our risk assessment for the year ended December 31, 2017, the areas examined
were those representing the highest risk of fraud, loss, abuse, or noncompliance. The following
areas were examined during this audit period:
Rooftop plaza: controls over charges and billing
Salmon Bay Marina: controls over moorage revenue; charges and billing and cash
receipting
Assets susceptible to loss and theft: controls over the safeguarding, tracking, and
monitoring of these assets
Compensation increases for non-represented employees: controls over the job
evaluation process and compliance with the Commission approved Salary and
Benefits Resolution.
Washington State Auditor’s Office Page 5
RELATED REPORTS
Financial
A financial statement audit was performed by a firm of certified public accountants. That firm’s
report is available on our website, http://portal.sao.wa.gov/ReportSearch.
Federal grant programs
A firm of certified public accountants evaluated internal controls and tested compliance with the
federal program requirements, as applicable, for the Port’s major federal programs. That firm’s
report is available on our website, http://portal.sao.wa.gov/ReportSearch.
Washington State Auditor’s Office Page 6
INFORMATION ABOUT THE PORT
The Port is a municipal corporation of the State of Washington (the state), organized on
September 5, 1911, through enabling legislation by consent of the voters within the Port district.
In 1942, the local governments in King County, Washington (the County) selected the Port to
operate the Seattle-Tacoma International Airport (the Airport). The Port is considered a special
purpose government with a separately elected commission of five members. The Port is legally
separate and fiscally independent of other state or local governments. All revenues and receipts
must be disbursed in accordance with provisions of various statutes, applicable grants, and
agreements with the holders of the Port’s bonds.
The Port and its Enterprise Fund, which is used to account for operations and activities that are
financed at least in part by fees or charges to external users, is comprised of three operating
divisions. The Aviation Division manages the Airport serving the predominant air travel needs of
a five-county area. The Maritime Division manages industrial property connected with maritime
businesses, recreational marinas, Fishermen’s Terminal, cruise, grain and maritime operations.
The Economic Development Division focuses on managing the Port’s industrial and commercial
properties including conference and event centers, encouraging tourism, developing small business
opportunities, and providing for workforce development in the aviation, maritime and construction
industries.
For 2017, the Port had total operating revenues of $632 million, which represents a 5.6 percent
increase from 2016. Total operating expenses increased from $325.3 million in 2016 to $373.0
million in 2017. The Port’s net operating income before depreciation decreased $14.1 million
from 2016 to 2017.
Contact information related to this report
Address:
Port of Seattle
Attn: Debbi Browning
P.O. Box 1209
Seattle, WA 98111
Contact:
Debbi Browning, Assistant Director, General Accounting & Business
Telephone:
206-787-3081
Website:
www.portseattle.org
Information current as of report publish date.
Audit history
You can find current and past audit reports for the Port of Seattle at
http://portal.sao.wa.gov/ReportSearch.
Washington State Auditor’s Office Page 7
ABOUT THE STATE AUDITOR’S OFFICE
The State Auditor's Office is established in the state's Constitution and is part of the executive
branch of state government. The State Auditor is elected by the citizens of Washington and serves
four-year terms.
We work with our audit clients and citizens to achieve our vision of government that works for
citizens, by helping governments work better, cost less, deliver higher value, and earn greater
public trust.
In fulfilling our mission to hold state and local governments accountable for the use of public
resources, we also hold ourselves accountable by continually improving our audit quality and
operational efficiency and developing highly engaged and committed employees.
As an elected agency, the State Auditor's Office has the independence necessary to objectively
perform audits and investigations. Our audits are designed to comply with professional standards
as well as to satisfy the requirements of federal, state, and local laws.
Our audits look at financial information and compliance with state, federal and local laws on the
part of all local governments, including schools, and all state agencies, including institutions of
higher education. In addition, we conduct performance audits of state agencies and local
governments as well as fraud, state whistleblower and citizen hotline investigations.
The results of our work are widely distributed through a variety of reports, which are available on
our website and through our free, electronic subscription service.
We take our role as partners in accountability seriously, and provide training and technical
assistance to governments, and have an extensive quality assurance program.
Contact information for the State Auditor’s Office
PublicRecords@sao.wa.gov
(360) 902-0370
(866) 902-3900
www.sao.wa.gov